On May 9th, Donald Trump, in a rare move, publicly expressed support for cryptocurrency. According to Fox News, Trump will ensure that cryptocurrency can be used for his campaign donations. In a widely circulated video speech, Trump asked if we can donate to the Trump campaign using cryptocurrency, and he believes the answer is yes.
Influenced by Trump’s remarks, the meme token TRUMP briefly reached $6.09, with a 24-hour increase of 26.09%.
Strictly speaking, Trump has always been critical of cryptocurrency. As early as 2019, during his presidency, Trump expressed his dislike for cryptocurrency, stating that they are “not money.” He even said that he has always liked one currency, which is the US dollar.
This change in stance occurred on February 20th. At that time, Trump, in an interview with Fox News before the South Carolina primary, said, “I can accept Bitcoin.” This statement was interpreted as Trump softening his stance on Bitcoin. It quickly sparked a public debate. Trump also mentioned that Bitcoin has its own life and may need some regulation. Many people are accepting it. I see more and more people wanting to pay with Bitcoin. Anyway, I can accept it.
In summary, this is the second time that Trump publicly supports Bitcoin. From criticism to support, why did Trump’s stance change? I believe it is because of the voting power of the cryptocurrency audience. According to incomplete statistics, as early as 2022, close to 14% of Americans held digital assets, with young people being the majority. Two years later, against the backdrop of the SEC approving Bitcoin ETFs, this number will only increase, not decrease.
From the current time point to November, it is a critical moment for the US presidential election, and Bitcoin is an important digital asset pursued by young people. It is not difficult to imagine that the real motivation behind Trump’s statement is to cater to the widespread Bitcoin-loving young audience and hope that they will vote for him. So it is wise to stand on the side of the young Bitcoin audience. Pulling votes is currently an important task for both Trump and Biden. In fact, Biden launched a round of vote-pulling propaganda on social media platforms like X and TikTok regarding Bitcoin before Trump.
This move has been tried and tested. Why? If readers are interested, they can refer to and review the impact of the Bitcoin statements made by Argentine President Bitcoin enthusiast Millet before running for president. And the impact of Salvadoran President Bukele’s support for Bitcoin during the second election.
On May 8th, Forbes reported that Bitcoin and cryptocurrencies will play a larger role in this year’s US presidential election than in 2016 or 2020. According to a survey commissioned by Digital Currency Group (DCG) from Harris Poll, approximately 21% of voters in key swing states consider cryptocurrency policy to be an important topic, enough to shake their support.
At the same time, according to a report by consumer rights organization Public Citizen using data from Opensecrets, the crypto industry’s Super Political Action Committee has raised about $100 million for the 2024 congressional elections.
Coincidentally, in stark contrast to Trump, the White House announced today that Biden will veto legislation that “allows financial companies to custody Bitcoin.”
According to Bitcoin Magazine, the White House’s Office of Management and Budget stated: The government strongly opposes the passage of H.J. Res. 109 because it would undermine the Securities and Exchange Commission’s (SEC) work to protect investors in the cryptocurrency market and maintain a broader financial system. If the president receives H.J. 109, he will veto it. The legislation’s original intent was to allow regulated financial companies to act as custodians for Bitcoin and other cryptocurrencies.
Billionaire Tim Draper posted on social media stating that the White House’s veto of the legislation is pushing entrepreneurs out of the United States. Tim Draper said, do you know where all the new jobs and almost all innovation come from? They come from entrepreneurs who are starting to leave the United States.
According to the Congressional Review Act (CRA), H.J. Res. 109 would overturn the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin (SAB) No. 121, which imposes restrictions on financial institutions holding digital assets. By overturning SAB No. 121, this bipartisan resolution will remove obstacles for regulated financial institutions and companies to act as custodians for Bitcoin and digital assets.
Patrick McHenry, Chairman of the House Financial Services Committee, expressed support for overturning the SEC’s SAB 121, saying, SAB 121 is one of the most obvious examples of Gary Gensler’s overregulation during his tenure at the SEC. Through SAB 121, the SEC is trying to dictate how financial institutions and companies protect Americans’ digital assets under the guise of employee guidance.
“SAB 121 requires financial institutions and companies that protect customer digital assets to hold these assets on their balance sheets. This means that banks need to bear a significant amount of capital, liquidity, and other costs under the existing prudential regulatory framework. This effectively makes the cost of financial institutions custodian digital assets too high. This is very different from how traditionally regulated banks are required to treat assets they hold on behalf of their clients.”
US Congressman French Hill also spoke in support of H.J. Res. 109, saying, using custodial assets as reserve funds is not a standard financial service practice. The Biden administration’s SAB 121 is wrong and should be repealed.
The US Chamber of Digital Commerce is a US advocacy organization that promotes the development of the Bitcoin industry in Washington, D.C. Cody Carbone, the organization’s Chief Policy Officer, stated: President Biden made a government policy statement stating that he will veto H.J. Res 109, which would repeal the joint resolution to abolish the Securities and Exchange Commission’s Staff Accounting Bulletin (SAB) 121. This is disappointing to us. SAB 121 effectively prohibits trusted custodians from managing digital assets.
Earlier this year, US Congressmen Mike Flood and Wiley Nickel co-wrote a bipartisan op-ed on the “flawed SAB 121 guidance” by the Securities and Exchange Commission, pointing out that “when it comes to custodianship of digital assets, it is clear that our most regulated institutions need to be involved.” They expressed concerns about the lack of custodian options for Bitcoin spot ETFs, as this could lead to concentration risk.
As a result, H.J. Res 109 was officially passed in the House of Representatives by a vote of 228 to 182 and now enters the Senate process.
If the cryptocurrency audience votes based on Trump and Biden’s performance today, Trump is undoubtedly the winner.
Additionally, Jeff Kendrick, Director of Forex and Cryptocurrency Research at Standard Chartered Bank, believes that Trump and the Federal Reserve could help Bitcoin reach a historic high of $200,000 by 2025, bringing the cryptocurrency market cap back to around $4 trillion.
Kendrick’s reasoning is that as the US fiscal dynamics become increasingly unsustainable, the risk of the Federal Reserve monetizing government debt is increasing. This could prompt the price of Bitcoin to soar to between $150,000 and $200,000 by the end of 2025 as investors seek alternative assets.
Kendrick stated, “As investors seek alternative assets, this situation will broadly support digital assets. We believe that Trump’s second term government will be widely positive through a more favorable regulatory environment.”
